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Universal Credit

Question for Department for Work and Pensions

UIN 74626, tabled on 15 July 2020

To ask the Secretary of State for Work and Pensions, with reference to the National Audit Office report entitled Universal Credit: getting to first payment, published 10 July 2020, what steps her Department is taking to reduce fraud and error in universal credit claims.

Answered on

24 July 2020

The Department for Work and Pensions (DWP) takes the issue of fraud and error extremely seriously and continues to implement new initiatives to tackle it.

The National Audit Office (NAO) report (Universal Credit: getting to first payment) recognises at paragraph 2.23, that DWP and Her Majesty’s Revenue and Customs (HMRC) categorise fraud and error differently. Under the Tax Credit regime, HMRC makes a provisional award to claimants based on the information it holds and then calculates their actual entitlement after the end of the year. Any overpayment, due to a change in the claimant’s income during the year, does not count as fraud and error. Therefore, it is not possible to compare directly with Universal Credit.

NAO also acknowledge that DWP’s fraud and error levels were always going to increase as claimants migrate from Tax Credits (administered by HMRC) onto Universal Credit. DWP maintains that Universal Credit is better designed than the benefits it replaces and that, once in steady state, we still expect it to lead to savings in fraud and error and overpayments across welfare. As the NAO reported at paragraph 2.24 of their report there are net fraud savings from the introduction of Universal Credit to the Exchequer of £62m in 2018/19.

Prior to the COVID-19 pandemic we were making increased use of data and analytics as part of our approach to combatting fraud and error. We further optimised this capability following the outbreak of the pandemic by bringing together a number of intelligence teams from across the Department to create our Integrated Risk and Intelligence Service (IRIS). You will appreciate that it is not possible to describe the mechanics used by these teams without potentially compromising their effectiveness. However, by continuing to work across Government and with existing third party suppliers, IRIS helps to ensure a joined up approach to tackling fraud and error.

In addition, the verification of new claimants’ identities has remained at the core of the checks DWP undertakes before new claims are processed. Whilst DWP’s COVID-19 response has necessitated the removal of face to face contact with all but our most vulnerable customers, we have reduced the fraud and error risks this might pose, by introducing new and robust verification procedures. This includes the use of unique biographical questions (questions based on information DWP already holds about an individual), uploading ID documentation, and where appropriate, seeking additional verification via our newly established Enhanced Checking Service.